Can In-Law Units Help Solve SF’s Housing Woes?

A new proposed ordinance will allow more "In-Law" Units in Existing Housing. Image: Pixabay.
A new proposed ordinance will allow more “In-Law” Units in Existing Housing. Image: Pixabay.

There seem to be two points of view on San Francisco’s frustrating housing situation: either the tech industry is to blame for increasing demand or it comes down to NIMBY homeowners hoarding housing stock and preventing new development. Or maybe it’s some combination of the two?

Clearly, there’s a desire to keep San Francisco looking like San Francisco; nobody wants to tear down Painted Ladies and build high rise condos in their place. And there’s room for the condo towers elsewhere. But what if there were a way to create 33,000 new housing units in San Francisco, quickly, without any heavy construction or changes to neighborhood aesthetics?

In-Law units, also known as “Accessory Dwelling Units” (ADU) aren’t necessarily the most glamorous solution, but in a city with the median price of a one bedroom at $3500 per month, the highest rent in the nation, maybe it’s time to let the market add inventory–even if it includes garage and basement apartments.

Currently, ADUs are permitted only in District 3 and District 8. So Supervisor Aaron Peskin has a simple proposal: if someone has a house with a shed, or a garage, anywhere in the city, and they’re willing to add windows, doors, and whatever else they need to get that extra space up to code, then let them turn it into an apartment. “This legislation is intended to spread density more equitably throughout the city and has the potential to create upwards of 33,000 new permanently affordable units, based on the city’s own projections,” said Peskin, in a prepared statement.

“We are not creating new construction or subdividing an existing address–we are only creating new opportunities for housing within the existing space,” explained Sunny Angulo, Legislative Aide to Peskin. “Examples would be a shack in the backyard, a garage or a basement unit that could become a dwelling with the addition of windows.”

According to the 2010 Census, San Francisco is already the most densely populated city in California and the Bay Area is the second most densely populated urban area in the US, after New York City. That density, if properly managed, can be a great thing for encouraging a more walk and bike-friendly lifestyle. “Supervisor Peskin’s legislation aligns with SPUR’s agenda to address the housing affordability crisis in San Francisco,” said Gabe Metcalf, Executive Director of SPUR, the San Francisco Bay Area Planning and Urban Research Association. “The legislation will add and preserve affordable housing supply to a desperate market.”

Converting all of these garages into apartments can help address housing woes. Photo: Wikimedia Commons.
Converting garages can help address housing woes without changing the character of a neighborhood. Photo: Wikimedia Commons.

The proposal bans the new units from being used for Airbnb. Additionally, they will fall under rent control–so once someone moves in, city regulations on increases will kick in. “Housing costs have skyrocketed, which have led San Francisco to be the most expensive city to live in the nation,” according to the announcement from Peskin’s office. “Housing costs in San Francisco are beyond the reach of the vast majority low- and middle-income households. Approximately 90 percent of individuals earning less than $35,000 and over 50 percent of individuals making from $35,000 to $75,000 are spending more than 30 percent of income on rent.”

A couple of days ago, Streetsblog did a story about the expected re-use of garage and parking spaces brought on by ride-hail services which, presumably, will reduce the number of private cars that sit idle 95 percent of the time. If that’s going to be realized, it must be accompanied by an opening up of ADUs. And, according to Peskin’s deputy, that’s exactly what they’re thinking.

“This is an impressive proposal to expand the supply of rent control housing through secondary units across the city, and it is good to see specific controls to ensure long-term affordability to serve the needs of low income and middle income residents,” said Peter Cohen, co-directors of San Francisco’s Council of Community Housing Organizations.

Peskin’s ordinance just got put out there this week, so time will tell if the other supervisors will sign on and how far the idea of a citywide ordinance will get. But it’s an idea that’s been growing in popularity–at the state level too–as the region struggles to find more housing.

  • RichLL

    There is just one tiny snag to this. Currently single-family homes are exempt from rent control. That is by virtue of state law so the city cannot change it.

    However, if an owner adds an in-law unit to the mix then, regardless of whether DBI says it is legal or not, the result is that not only is that in-law under rent control but so is the main house itself.

    So it could be a suicidal move for an owner to add a second unit unless the new units allowed by this legislation are explicitly excluded from rent control.

  • dawdler

    “permanently affordable”? What does that mean?

  • ZA_SF

    I suspect a change of regulations in favor of in-laws would more likely bring more existing units into the light, maybe increasing standards, than it would actually increase housing availability. Ironically, it may even decrease available housing in the short-term, as more illegal and greymarket units are forced to get into compliance.

    Also: while car break-ins continue to spiral to new records, there is little incentive for a property owner with an available garage to lose their secure parking, particularly if adding tenants also adds cars to crowded streets.

  • The other issue for an owner is that once you rent to someone under rent control, it’s possible you’ve got them living with you for life. Some are more sanguine about this than others, but it’s not a step to take lightly.

  • Steep Ravine

    We’ll have to seriously deter people from owning cars by providing the best public transport and safe neighborhood streets to residents.

  • mx

    Indeed. Unfortunately, the last few days have demonstrated how far behind we are from that vision.

  • Matthew Barnes

    Patently illegal to add *new* units under rent control per Costa-Hawkins. Guess the whiny liberals never thought of that. (Is Peskin *actually* retarded?) Might be the undoing of the whole “system”. Not that that would be a bad thing.

  • murphstahoe

    as if anyone in SF actually puts a car, not their crap – in their garage.

  • Carl

    Don’t want more in-law units. Don’t want more dense neighborhoods. Don’t want more cars all over the place, parked across driveways and on sidewalks. Neighborhoods were zoned this way for a reason – please stop trying to get around zoning. San Francisco is full. Please focus on enforcing laws rather than trying to find sneaky ways to get around them.

  • gneiss

    Supervisor Peskin knows very well that few homeowners will build these units for new renters if rent control is one of the conditions. Not to mention his whole argument that this will somehow create housing for those earning less than $50,000 is completely unrealistic.

    However, what this will do, is expand the stock of multi-generational housing in the city. One could very well see an older couple wishing to downsize building out one of these units on their property for themselves to allow at least one of their children to occupy the main house and raise a family. However, I cannot imagine that the family would ever want to subdivide the property to make this a separate rental unit so long as rent control in perpetuity is one of the conditions of ownership.

  • gneiss

    San Francisco is not full and laws can be repealed and changed. Moses did not come down from Mount Sinai to tell us that every house needs a parking space.

    If you want to keep living your suburban dream of driving all over the place, you’re living in the wrong city. San Francisco didn’t start out as a city for cars, and there’s no reason why it has to continue to be one.

  • baklazhan

    “San Francisco should be reserved for a limited, exclusive number of people, and if that means it costs a million dollars to live here, so be it.”

    Fortunately, not everyone thinks like you do.

    (And no, I don’t like cars parked on the sidewalk. You know how that can be dealt with? By giving tickets to cars parked on the sidewalk. Which has zero to do with in-laws.)

  • baklazhan

    If you are referring to Bart’s problems, allowing more people to live in SF seems to be an effective mitigation strategy.

  • Matthew Barnes

    Nope. New construction on the in-law. Not under rent control. Now it may be that the original house could possibly come under rent control – but I doubt it.

  • Szia

    The real problem is not the tech industry or even NIMBY’s- it’s lack of real rent control. No matter how many units we build or create, they will quickly become un-affordable if landlords can charge whatever they deem the “market will bear”. What does that really mean? It means they can charge 50% of what people make each month. What’s the point of great, high-paying jobs if landlords get 50%? This Sunday’s NY Times opinion, “The Eviction Economy” http://www.nytimes.com/2016/03/06/opinion/sunday/the-eviction-economy.html?_r=0 got it half right, the problem is landlords are making WAY TOO MUCH PROFIT on housing, a resource that is essential to human health and existence. But he got the solution wrong–the answer is NOT to shift the burden of paying outrageous rents to the government, it’s to pass solid rent control measures so that rents don’t get outrageous in the first place. Berlin (also faced with rising rents do to a booming tech industry) just did it. So can we.

  • RichLL

    Matthew, that is not the case right now. Assuming that the in-law unit is carved out of the existing envelope of the building rather than is a new structure, then the post-1979 exemption to rent control would not apply. Just ask any of the thousands of owners who currently rent out an in-law unit and who have to deal with rent control.

    So Peskin’s Law, if it happens, will either have to explicitly exempt the “new” units or he can expect to see very few of them built.

  • RichLL

    Blaming a landlord for doing nothing other than asking the market rent seems like an unfair characterization to me. When an owner offers a place for rent there are typically multiple bids from tenants. The landlord may take the highest bid or he may take a lower bid if he prefer that tenant. But he won’t take a bid that is 40% or 50% below that level.

    In other words, it is really the tenants that are setting these rents via their demand. The landlord is simply the person engaged in price discovery – discovering the price that renters are willing and able to pay to get the place over the competition.

    And the city cannot pass laws that set a cap on rents, because that is explicitly illegal under state law. All the city can do is what it does do -limit subsequent rent increases and require cause for an eviction.

  • RichLL

    Agreed, and in fact that is the original idea behind these units and why they are often called “in-law units”. You move your mother-in-law into the unit when she gets old so you can better look after her. Multi-generational housing.

    The only bonus to renting them under rent control right now is that you don’t get trapped. You can go to the DBI, get the unit declared “illegal” and then evict for cause. If Peskin makes these units legal then that “get out of jail free” card would no longer work. And then renting an in-law unit would be a life sentence for the owner

  • Carl

    You’re going to hit a limit at some point, be it now or in five hundred years. Why not now?

  • Carl

    I’m living in the right city. People who are trying to figure out ways to squeeze the city for every last unit of habitation are living in the wrong city – this should be obvious. They are *priced out*.

  • Carl

    Bart is a normal boy, he is just going through a rough period.

  • RichLL

    Well, cars weren’t invented when San Francisco started out, as with most cities, so that’s not really an argument.

    I think it makes more sense to recognize that cars make sense in some parts of the city (the south and west, particularly) whereas in some of the crowded north and eastern parts, cars can be somewhere between inconvenient and a liability.

    The other problem is that SF is really just a part of a much larger city – the Bay Area. And weaning an urban area that is approaching 100 miles by 100 is a very ambitious target,

  • Szia

    You are right RichLL- state law currently prevents cities from enacting reasonable and effective rent control. The passage of Costa Hawkins in 1995, greatly weakened the rent control by allowing landlords to raise their rents to market whenever someone moves out. And look at the result: massive displacement and gentrification of San Francisco and most other bay area communities; teachers unable to live in SF; people enduring hideous commutes which increase greenhouse gases in order to get to their jobs; artists, nonprofit workers, and working class people no longer able to live in and contribute to the cultural fabric of SF. Is increasing landlords’ profit margins worth all that? It’s time to overturn Costa Hawkins, and re-establish the real rent control we had before it was passed.

  • Matthew Barnes

    Could be. Though that’s not what I heard from a counselor at the Berkeley RSB two years ago when I foolishly looked into legalizing the in-law below my house that was built in the mid 80s. (Though, come to think of it, it’s not likely that they would tell me the truth…)

  • alberto rossi

    re: “without any heavy construction or changes to neighborhood aesthetics”

    You’re defining aesthetics very narrowly here. If you want to see how rampant in-law units actually affect a neighborhood’s aesthetics, just take a walk around the Excelsior.

    re: “spread density more equitably throughout the city”

    Most people don’t live in far off neighborhoods like the Excelsior because they’re elitists trying to avoid density. They live there because, when they went house shopping, they quickly learned that they never could afford Noe or Bernal or Glen Park or even Sunnyside. More density in the southern and western will be more equitable when these parts of the city also get their share of jobs, cultural institutions, attractions, transit, etc.

    I don’t know why Streetsblogs would be promoting this. More than half the people in these outlying areas commute to work by driving solo. It’d be great if the transit out here were vastly improved, but, as the BART story show, we’re having trouble even maintaining the level of transit we have now.

  • RichLL

    Berkeley’s rent control, although similar in principle, and even more extreme in some ways, is nonetheless different from San Francisco’s, and I cannot speak about their rules.

    But in SF if an owner decides to “build” a new in-law unit it does not count as new construction. And that makes sense because it is usually just a matter of putting up some sheet-rock, putting in the odd door and window, and changing around the plumbing and electrics.

    In fact, even if a new unit were a totally separate structure (and you do see “carriage houses” in the backyards of some homes) I believe that rent control will still apply because rent control works ultimately off lots and not off structures. Two separate units in two separate buildings on the same lot = rent control.

    And as noted, the real killer here is that the existing SFH would also fall under rent control, which could lead to the bizarre situation where the owner has to Ellis his own SFH in order to live in it.

  • RichLL

    “The passage of Costa Hawkins in 1995, greatly weakened the rent control by allowing landlords to raise their rents to market whenever someone moves out”

    At that time only Berkeley and Santa Monica had vacancy control. The San Francisco voters actually rejected it when given the chance. So at least in SF landlords could always raise the rent to market upon a vacancy. Costa-Hawkins didn’t change that.

    The effect of Costa-Hawkins was not to evict or displace anyone. Pre-1996 tenancies were exempted from its provisions. Its main effect was to stop cities passing new laws to expand the scope of rent control, so in practice the number of controlled units in a city were capped and no new ones could be created (with a few special exceptions).

    SF had high housing costs before rent control, so the set of reasons for its expensiveness cannot be placed solely on the lack of rent control. Indeed, rent control can have the effect of freezing turnover, which drives up the rent for the few units that do come onto the market.

  • gneiss

    Stay classy, Carl. Nice to hear that you think San Francisco should be a community only the wealthy and lucky can live in. Not to mention having a place where our kids can raise their families. I’ll just tell them when they ask why they can’t live here, it’s because people like you have decided that they are “priced out”.

  • jonobate

    The weirdest thing about the SF housing debate is that the people opposed to new buildings are either wealthy property owners who don’t want new buildings because restricting growth will increase the value of the existing buildings; or low income folks who are opposed to new buildings because the rent control laws inevitably means that the new reidences will cost more than existing rents, so “rich people” will move into the neighborhood and that’s kinda sorta the same thing as gentrification,

    It’s a weird coalition of people with completely different class interests, who mask their differences by talking in general non-economic terms such as “preserving neighborhood character”.

  • SF_Abe

    Let’s build a second downtown in West Portal!

    Seriously, it’s the neighborhood second-best served by Muni– 15 minutes from the Financial District. Build office towers there and people living in the Sunset and Parkside (and Excelsior) won’t have to go all the way downtown for work. People living in the dense north-east part of town can still get there without tons of transfers.

  • baklazhan

    Because unaffordable housing, displacement, long commutes, and environmental degradation are all real problems that can’t be ignored.

  • Carl

    I’m pretty sure they can be ignored. Anyway, they can build the megalopolis you seek in South S.F.

  • Carl

    Agreed.

  • sebra leaves

    This is about legalizing a situation that already exists. Not too many people can afford high rents so they are already living in crowded in-law style situations. There really is no enforcement of illegal use now. So this is sort of codifying a situation that already exists and unless someone hires a lot of staff to collect, they never will.

  • sebra leaves

    Just because there is a tunnel and a stop in a neighborhood, does not mean that the system can carry any more people than it is carrying now. Whoever got the idea that a transit line needs more dense housing isn’t thinking clearly. Those lines that go through West Portal only stop there on the way to denser neighborhoods. Muni is at capacity now. There are too many new projects in the “pipeline” to serve and BART is falling apart. The upcoming elections will be a referendum on development. So far, it is looking as if the citizens have had enough of it.

  • alberto rossi

    I don’t know if it’s the weirdest thing, but one very weird thing is how some people must think that the outlying single-family areas in SF are like St. Francis Wood, elite, exclusive, maybe even gated enclaves whose barricades must be stormed. In fact, most of these areas are pretty damn crappy and undesirable. SFHs there cost less than condos in the more desirable closer in areas. Adding small, substandard units in basements and garages will only make them even worse.

  • alberto rossi

    It’s a pretty contorted argument to say that the supply/demand imbalance for small units is being driven by the lack of supply in the outlying areas of the city.

    http://blog.sfgate.com/ontheblock/files/2015/03/map.png

  • SF_Abe

    Ha ha good one

  • Kraus

    Agreed. It’s “phony” legislation; merely for show — to hoodwink the gullible into thinking that he’s actually doing something about the housing crisis.

    If you want to incentivize the actually production of “in-law” units — which are a good idea — then you shouldn’t hamstring them with rent control.

    No one with a single-family property — and in their right mind — is going to encumber their home with the addition of a rent controlled in-law unit that would allow a tenant to park themselves for life and never be compelled to leave.

    Peskin knows this very well.

    This is simply more of his political grandstanding.

  • De Blo

    Abolish rent control. It is by far the biggest problem in San Francisco.

  • De Blo

    Rent control on in-law units in single-unit houses and bans on guest room-sharing through sites like Airbnb are attacks on the working class and middle class families of homeowners in this City and cannot be tolerated.

  • De Blo

    It is only 11 minutes from Excelsior to downtown via Glen Park BART.

  • De Blo

    No, the passage of rent control in 1979 is what drives foreclosure and displacement as homeowners cannot charge fair rent. Tens of thousands of housing units in the City sit vacant because of the existence of rent control. We need to abolish rent control now.

  • De Blo

    NO, rent control is THE problem, along with horrific affordable housing mandates. Abolish rent control now.

  • De Blo

    Rent control is a taking of property that drives blight and crime, hurts homeowners, and skews the housing market. Cities with rent control invariably have more expensive housing costs. In every case, without exception, that rent control has been instituted, it has had deleterious effects on a city.

  • De Blo

    If you cannot afford to live here, then please move to Alabama and quitting trying to destroy our City.

  • De Blo

    Simply put, San Francisco needs to abolish rent control or the market will continue to be skewed.

  • Carl

    Well, they need to. Illegal in-laws are crowding our neighborhoods. Enforcement needs to kick itself into gear, not try to reverse laws they never enforced.

  • SF_Abe

    The Glen Park BART station is Only adjacent to the Excelsior, as is Balboa Park. I think West Portal is the ideal candidate for a second downtown because so many transit lines feed INTO it (not from it to Downtown).

    If you put a significant number of commercial and office buildings in West Portal, people who live in the Excelsior, Parkside, Sunset, etc. are suddenly way closer to jobs than they are now. Any neighborhood along Market can also get there quickly, and even East Bay commuters can transfer easily from BART.

    This has the side benefit of balancing traffic on Muni. Right now in the morning nearly all the traffic is heading into downtown, with empty buses outbound. Having another job center at the other end of Muni’s “spine” would make use of those empty seats.

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